JPMorgan bank shows unexpected drop in profit over legal costs

Beset by legal costs exceeding $1 billion over the alleged rigging of foreign exchange markets, JPMorgan Chase reported a 6.6 percent fall in quarterly profit, leading CEO Jamie Dimon to claim that "banks are under assault."

The biggest U.S. bank by assets reported earnings of $4.93
billion, or $1.19 a share, for the three-month period ending in
December. This is less than most analysts expected. Last year, JPMorgan’s
fourth-quarter profits hit $5.28 billion, or $1.30 a share.

Major penalties proved to hamper JPMorgan’s bottom line, as it
agreed in November to pay $900 million in new legal expenses, or
$1.1 billion on a pretax basis, over alleged manipulation of
foreign exchange markets – the latest legal action associated
with the financial crisis.

In addition to JPMorgan, other major banks -- including UBS,
Citigroup, Royal Bank of Scotland, HSBC, and Bank of America --
were
accused of tampering with currency interbank rates on the
largely unregulated $5.3 trillion-a-day foreign exchange market.
Bankers worked together and sent secret signals to manipulate the
important currency benchmarks to boost bank profits.

JPMorgan, the first major bank to release fourth-quarter earnings
totals for 2014, also faces ongoing investigations in other areas
of its business, including accusations of manipulation of Libor
interest rates.

JPMorgan’s fourth-quarter totals were also hit by a 14 percent
decrease in revenue from fixed-income trading, after adjusting
for the sale of the bank's physical commodities business and
accounting changes, according to Reuters.

Overall in 2014, JPMorgan reported profit of $21.8 billion, a 21
percent increase and an all-time company high for annual profit,
according to the Times.

Yet, the fourth quarter in 2014 was worse than one year ago
despite the fact that, in November 2013, JPMorgan agreed
to a $13 billion settlement for selling "bad loans"
ahead of the US financial crisis. The fine, a result of a massive
mortgage fraud probe by the US Justice Department, was the
biggest penalty for a financial firm in US history.

JPMorgan &Co have become the world's biggest organized
crime syndicate. $178B in government kickbacks have kept their
criminal scheme going.

“Everyone who bought them experienced massive losses,”
he said. “What a lot of people don’t understand in the
financial crisis is that if you have a pension, or you were
involved in a mutual fund or your state’s retirement fund was
invested in mortgage backed securities, you probably woke up at
some point in late 2008 and noticed that 30 to 40 percent of that
fund had disappeared. In large part, this was because banks like
Chase and other companies were selling these defective products
to investors, and they were experiencing massive defaults and
massive losses."

“So everybody who bought into this pool of loans lost an
enormous amount of money. And for the most part it was ordinary
people. One group of litigants that I talked to was largely
comprised of construction workers in the West; their retirement
fund was invested in this stuff and they lost $50 million in the
first year that they bought in. Ordinary people lost enormous
amounts of money because of this behavior.”

The cascade of federal investigations and bad headlines, as well
as a successful bout with throat cancer, has not deterred Dimon,
who told Fox Business this week that
"JPMorgan is the best I can do for country and
humanity."

"If I do a good job here I can help people with their
careers. We help consumers and big businesses. We help countries.
We bank governments, sovereign wealth funds, and we're hugely
charitable. You know, the work we're doing in Detroit. We've
hired 8,000 veterans. This is my contribution. This is the best I
can do, so [cancer] hasn't really changed that."